If Nation Z produces donuts at a higher opportunity cost than Nation A, which of the following is true? Nation Z must have an absolute advantage in producing donuts There is insufficient information to determine comparative and absolute advantage A C E Nation Z must have a comparative advantage in producing donuts Nation A-must have an absolute- advantage in producing donuts B D Nation A must have a comparative advantage in-producing donuts

If Nation Z produces donuts at a higher opportunity cost than Nation A, which of the following is true? Nation Z must have an absolute advantage in producing donuts There is insufficient information to determine comparative and absolute advantage A C E Nation Z must have a comparative advantage in producing donuts Nation A-must have an absolute- advantage in producing donuts B D Nation A must have a comparative advantage in-producing donuts

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 30P: In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10...

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In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios. Who has the absolute advantage in the production of rubber or radios? How can you tell? Calculate the opportunity cost of producing 80 additional radios in Japan and in Malaysia. (Your calculation may involve fractions, which is fine,) Which country has a comparative advantage in the production of radios? Calculate the opportunity cost of producing 10 additional tons of rubber in Japan and in Malaysia. Which country has a comparative advantage in producing rubber? In this example, does each country have an absolute advantage and a comparative advantage in the same good? In what product should Japan specialize? In what product should Malaysia specialize?
Suppose Country A can produce 200 toys or 400 pineapples per day, while Country B can produce 300 toys or 900 pineapples per day. Where do the comparative advantatges lie? Should trade take place?
Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in producingautos?WhatistheopportunitycostofproducingonepoundofbeefinBrazil?Whatistheopportunitycost of producing one pound of beef in the United States?
In Country T, it takes 10 resources to produce 1 ton of cocoa and 13.5 resources to produce 1 ton of rice. In Country Y, it takes 40 resources to produce 1 ton of cocoa and 20 resources to produce 1 ton of rice. Country T has a comparative advantage over Country Y in cocoa. This follows the theory of comparative advantage, and we can say that engaging in free trade benefits all countries that participate in it; however, this conclusion stems from which of these inaccurate assumptions? Multiple Choice We have assumed constant returns to scale. We have assumed the prices of resources and exchange rates in the two countries are dynamic. We have assumed there are barriers to the movement of resources from the production of one good to another within the same country. We have assumed that agrarian nations do not specialize in producing particular products. We have assumed diminishing returns to specialization.
Kayla can cook dinner in 30 minutes and wash thelaundry in 20 minutes. Her roommate takes twiceas long to do each task. How should the roommatesallocate the work?a. Kayla should do more of the cooking based onher comparative advantage.b. Kayla should do more of the washing based onher comparative advantage.c. Kayla should do more of the washing based onher absolute advantage.d. There are no gains from trade in this situation.
Country A can produce gadgets at a lower opportunity cost than any other producer of gadgets. As a result Country A must have . a) a superior gadget making technology b) an absolute advantage in gadget production c) a comparative advantage in gadget production d) a constant opportunity cost associated with gadget production e) more factors of production devoted to gadget production than any other country
Bill and Fred bake cakes and pies. Bill's opportunity cost of baking 1 pie is 3 cakes. Fred's opportunity cost of baking 1 pie is 5 cakes. Who should bake the pie? Group of answer choices Fred Bill A country should specialize in producing the goods for which it has the highest opportunity cost. Group of answer choices True False If a country has a comparative advantage in producing fish, then they must also have an absolute advantage in producing fish. Group of answer choices True False
Absolute and comparative advantage Consider two neighboring island countries, Botoga and Doporia. Each has 900,000 labor hours available per week that it can use to produce wheat, jeans, or a combination of both. The following table shows the amount of labor hours required to produce 1 bushel of wheat or 1 pair of jeans. Wheat Jeans Country (Labor hours per bushel) (Labor hours per pair) Botoga 40 10 Doporia 36 6 _______ (Botoga / Neither / Doporia) has an absolute advantage in the production of wheat, and ______ (Botoga / Neither / Doporia) has an absolute advantage in the production of jeans. Initially, suppose Botoga uses 225,000 hours of labor per week to produce wheat and 675,000 hours per week to produce jeans, while Doporia uses 675,000 hours of labor per week to produce wheat and 225,000 hours per week to produce jeans. Assume there are no other countries willing to trade goods, so in the absence of trade between these two countries,…
When two individuals produce efficiently and then make a mutuallybeneficial trade based on comparative advantage, a. they both obtain consumption outside their production possibilitiesfrontier. b. they both obtain consumption inside their production possibilitiesfrontier. c. one individual consumes inside her production possibilities frontier,while the other consumes outside hers. d. each individual consumes a point on her own production possibilitiesfrontier
Suppose there are two countries Peru and Japan that produce Food and Fuel. Peru can produce 7,523 units of Food or 17,853 units of Fuel using a labour force of 8000. Japan can produce 5,733 units of Food or 24,156 units of Fuel using a labour force of 5000. (c) Which country has the absolute advantage in food? In fuel? Explain. (d) Which country has the comparative advantage in food? In fuel? Explain. (e) Which good(s) should each country specialize in?
Suppose each worker in Home can produce 12 wheat or 4 TVs. Assume that Home has 10 workers. Suppose each worker in Foreign can produce 8 wheat or 2 TVs. Assume that Foreign has 20 workers. a. What is the no-trade relative price of TVs in Home and Foreign respectively?b. Which country has an absolute advantage in the production of wheat? Whichcountry has a comparative advantage in the production of wheat?c. Use two graphs (one for Home and one for Foreign) to display productionpossibilities along with indifference curves and label no-trade equilibria and a trade equilibrium constructed by you. (Assume that positive quantities of both goods are consumed in both countries in all equilibria). Pick your own numbers for the relative price in the trade equilibrium and for quantities consumed in the trade and no-trade equilibria for both countries.d. What is the real wage in units of wheat in Home in the no-trade and in your proposed trade equilibrium?e. Calculate the gains from trade for Home…
Assume each country's potential output per unit worker per month is given below. (answer questions 15-18 based on the following information) Corn (lb) Scarves(#)U.S. 20 10Mexico 25 5Which country has an absolute advantage in producing corn and scarves respectively a. U.S. in corn; Mexico in scarves b. U.S. in scarves; Mexico in corn c. Mexico in corn; Mexico in scarves d. U.S. in corn; U.S. in scarves